AOL, TiVo Hook Up on Interactive TV Service
America Online Inc. on Wednesday said it reached an agreement for TiVo Inc. to offer subscribers of AOLTV service the ability to create their own TV schedule and customize live television shows.
The three-year agreement also calls for AOL to take up to a $200-million stake in TiVo, which sells a VCR-like box that uses a computer hard drive to record TV programs, in exchange for warrants and additional TiVo shares.
The announcement sent TiVo shares surging by 57%, rising $12.23 to close at $33.80 on Nasdaq. The company’s shares have traded in a 52-week range of $15.75 to $78.75.
The deal would give TiVo the opportunity to increase its subscriber base quickly, TiVo spokeswoman Rebecca Baer said. She also said AOL was making itself a strategic partner in TiVo by taking the stake in the company.
The TiVo Personal TV Service digitally records television shows, without videotape, so consumers can watch what they want, when they want to watch it.
When the new service becomes available, AOLTV subscribers using select set-top boxes will be able to use features of the TiVo Service to pause, view in slow motion, or see instant replays of live television.
In addition, with the click of a button, users can tell TiVo to find and record their favorite programs every time they air.
“The combined product will be a powerful tool in making television richer and more entertaining,” Baer said.
The new box offering both services--AOLTV currently allows subscribers to chat online as they watch TV--is expected to be available by early 2001. TiVo currently has about 36,000 subscribers nationwide.
“We believe our agreement with AOL positions us to lead the evolution of personal TV to the next level and begins to bring TiVo closer to delivering the ultimate television experience,” Mike Ramsay, TiVo’s chief executive officer, said in a statement.
Under the agreement, AOL and Sunnyvale, Calif.-based TiVo will work together to develop a dual-purpose AOLTV-branded set-top box, and TiVo will become the exclusive provider of personal TV features on these set-top boxes.
The deal expands upon the previous alliance between America Online and TiVo, announced in August 1999.
Shares in America Online, which is acquiring Time Warner Inc., rose 81 cents to close at $52.44 on the New York Stock Exchange.
